Getting Your Car Back Legally After Lender Repossession
You should not lose hope if the lender on your car loan has taken away your car. Consumers in this position have certain options to consider if they want to get their vehicle back. The most obvious but perhaps the most difficult way to get your car back is known as redemption. This involves buying your car outright before the lender sells it. You would need to pay off the full balance on the loan, in addition to repossession costs, fees for storing the car, and any other costs incurred by the lender. While most people who have had their car repossessed do not have the resources to redeem it, sometimes circumstances change between the repossession and the vehicle’s sale. However, you may want to think twice about whether you want to redeem your vehicle. It may not be worth the total cost of redemption, and it may have been damaged during the repossession process.
After repossession, a consumer may have the option to redeem the vehicle before it is sold by paying the entire outstanding balance of the car loan, including interest, costs, and fees.
The lender responsible for repossessing and selling the car is legally required to provide you with notice of the sale and an explanation of what you need to do to redeem the vehicle. It should tell you how much you need to pay and the time window in which you need to meet the requirements. You should be aware that a sale following repossession is as final as any other sale, and your right of redemption expires with the sale.
The main alternative to redemption is reinstatement, which essentially involves reviving your loan. You would need to resolve any past due payments as well as late charges and fees. You may have a right to reinstatement under state law regardless of whether your agreement with the lender provides for this right, although many agreements do. If you have this right, the lender will provide you with notice of your right to reinstatement and a quote for the cost of the reinstatement. The quote will be valid for only a limited time after receiving the notice, which is usually 15 days.
Similar to repossession, you will lose your right to reinstatement when the car is sold or when the notice period ends without your paying the reinstatement amount. If you reinstate the loan, you should make sure to keep up with payments, or the lender may again repossess the car.
If you strongly want to get your vehicle back, you can always consider buying it at the lender’s auction. This may cost less than redemption, depending on the offers that other buyers make at the auction. If you buy the car for less than the amount of the loan, you will owe a deficiency balance to the lender for the remaining amount.
It is possible to continue negotiations with a lender even after the car has been repossessed.
Another alternative may involve negotiating over the arrears on your loan with the lender. Whether this is feasible may depend on the amount of the arrears, your previous interactions with the lender, and whether they are willing to negotiate. You might be able to refinance the loan or arrange for a new payment plan. The lender might even allow you to pay off part of what you owe and set a deadline for receiving the remaining payments. Ideally, you should start these negotiations before the repossession process. If you negotiate after repossession, however, you may be able to use any questionable actions by the lender during that process to help bolster your bargaining position.